Friday, August 28, 2009

Krauthammer Marks Out the Endgame for ObamaCare

This makes quite a bit of sense and I would be willing to bet that his vision will come to pass.

Promise nothing but pleasure -- for now. Make health insurance universal and permanently protected. Tear up the existing bills and write a clean one -- Obamacare 2.0 -- promulgating draconian health-insurance regulation that prohibits (a) denying coverage for preexisting conditions, (b) dropping coverage if the client gets sick and (c) capping insurance company reimbursement.

What's not to like? If you have insurance, you'll never lose it. Nor will your children ever be denied coverage for preexisting conditions.

The regulated insurance companies will get two things in return. Government will impose an individual mandate that will force the purchase of health insurance on the millions of healthy young people who today forgo it. And government will subsidize all the others who are too poor to buy health insurance. The result? Two enormous new revenue streams created by government for the insurance companies.

The only thing I want added to this is a national insurance marketplace that allows you to buy across state lines. This would favor huge companies like UnitedHealth, Humana, and Blue Cross Blue Shield and would shake out the lesser players. There will also be a consolidation in the industry as well.

The government can mandate that these companies offer several different competing plans that will be affordable by using their reimbursement structure in negotiations with the insurers. This can keep prices down and the insurance companies could create other plans that aren't reimbursed but are more expensive. So for instance, there can be a experimental drug benefit that the government doesn't reimburse but UnitedHealth can offer at a higher premium.

This is the Swiss Health Care system in a nutshell. The good thing about the Swiss system is that they are still innovating on the drug front so their health plan seems to be doing what ours should be doing. They pay a lower cost then we do, they don't have English and Canadian style wait times, and people are generally happy with their system. I think I could live with the Swiss system if they threw in a cap on malpractice suits because it gives consumers more choices and not less.

No comments: